Some worry regulations could stifle business activity, growth

Nov. 11, 2012

Written by

Brian Gadd

Staff Writer

Unemployment rates for select counties, 2008 vs. 2012

County

2008 (Average)

2012 (Sept.)

Coshocton

8.5

8.5

Guernsey

8.6

7.2

Muskingum

8.6

8.4

Former Republican Mass. Gov. Mitt Romney took the popular vote in these counties Tuesday night. Republican U.S. Sen. John McCain won these counties in 2008. Sources: Ohio Labor Market Information, county board of elections

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COSHOCTON — Despite millions of jobs lost across the country over the past four years, area counties show unemployment rates relatively unchanged and trending back up after a precipitous fall during the Great Recession.

But federal regulations and rule making proposed during President Barack Obama’s first term are set to take effect in his second, affecting existing and emerging sources of energy and could affect job creation.

The downside

As a small business owner, Kelly Moore said she had a very bad night realizing President Obama would be re-elected Tuesday.

The co-owner of four NAPA Auto Parts stores in Muskingum (Dresden and Zanesville) and Coshocton (Coshocton and West Lafayette) counties, Moore has spoken out for the past year about how new and pending regulations on energy development, health care and consumer products will hurt small business across the country.

“Now that Obama is re-elected, we know there is nothing we as small business owners can do about health care reform. It’s happening, but it’s an unknown, really frightening,” Moore said. “It’s going through, and we have to be compliant. That’s what our focus is. There’s nothing we can do but pass those costs along to our employees, and to our customers.”

She said that uncertainty will keep her from filling three open positions — the four stores currently employ a total of 19 people, down from 27 earlier in the year because of retirement or attrition.

“We’re getting more applications, but we just can’t hire,” she said. “With the health care bill going through, I don’t want to hire people and then have to lay them off when we find out how much health care is going to go up.”

Moore also is concerned how regulations on coal production will impact electricity rates, making it harder to keep the lights on because of rising costs. And she worries federal agencies such as the EPA will start regulating the fracking and drilling industry, which is just starting in the region.

Even though there are no fracking wells in Coshocton County, nearby Guernsey County has 24 at last count.

“We’re businesses, we need to heat and light our places, and I fear regulations are going to shut coal plants in our area, and the utilities that depend on coal to shut plants down,” she said. “That impacts us all. And even though natural gas is cheap right now, regulations run the risk of driving those prices up too.”

Instead of encouraging an environment where small businesses have to take out loans to stay afloat, government should get out of the way so small businesses can create jobs, she said.

“If I felt confident something was going to get done in Washington and we weren’t going to see all of these regulations continue, I would hire three people,” she said. “But I don’t and I won’t.”

The Coshocton County Port Authority and the Coshocton Chamber of Commerce refused to comment for this article.

Energy concerns

Melissa McHenry with American Electric Power in Ohio said the company is preparing for “whatever regulations come forward” with the understanding that rules already put in motion will mean some coal-fired power plants -- 84 percent of the electricity generated in Ohio comes from coal -- will close.

“The Picway plant south of Columbus will close. At the Muskingum River plant (near Beverly), we are still determining whether Unit 5 can be converted to a natural gas-fired operation. And at Conesville, Unit 3 will close,” McHenry said. “We’re not against regulations, we want to achieve the environmental goals, but we are against the accelerated timeline for compliance.”

The local impact will be felt soon, when 20 employees at the Conesville plant will be out of work. Four of the five units at the Muskingum River plant could be closed by June 2015, affecting 129 jobs.

The Environmental Protection Agency has given energy producers like AEP another 3 to 5 years to be in compliance with emissions standards, while the company was hoping to stretch out retrofits to 2020 “so that the cost will be less and the impact on customer rates will be less,” McHenry said.

A big issue for the company is having enough specialized labor to handle retrofits in such a short period of time, she said, and manufacturers who can supply equipment and components to switch some units from coal-fired to natural gas-fired operations.

McHenry said AEP advocates for a balanced energy policy which considers use of existing coal and natural gas resources along with wind and solar power.

“We’re heavily reliant on coal, and we don’t want to be heavily reliant on natural gas, because the price has been volatile,” McHenry explained. “And there are also concerns over the safety of fracking, seismic impacts. Natural gas development in the Utica Shale is great for Ohio and the economy. But people need to be willing to pay more when the price of natural gas goes up.”

Coal jobs in the region could also be lost as power plants switch over to alternatives like natural gas and more regulations take hold.

St. Clairsville-based Murray Energy announced plans in July to begin laying off half of its workforce at its mining operation in Jefferson County and later announced layoffs at its Powhatan mine near Alledonia in Belmont County.

Company officials said the cutbacks were solely because of federal regulations.

But groups like the American Coalition for Clean Coal Electricity and an Ohio legislator who represents a portion of our area are trying to fight back.

In late September, the Republican-controlled U.S. House voted 233 to 175 for the Stop the War on Coal Act , passing a bill that would limit the EPA’s regulatory authority over greenhouse gases and limit the Interior Department’s ability to issue coal mining rules.

Sponsor of that legislation, U.S. 6th District Rep. Bill Johnson (R-Marietta) said it’s time for federal agencies to take the boot off the neck of energy suppliers, especially coal mining operations in Eastern Ohio.

Flap over fracking

Jerry James, president of the Artex Oil Co. in Washington County, said environmental regulations handed down by federal agencies could dramatically slow down oil and natural gas production in the region.

“We’re already regulated at the state level. But he (Obama) has 13 agencies looking into rules for hydraulic fracturing. It’s like an open net was created to catch us,” James said. “The energy we are producing, it’s the lifeblood of our area. But regulations are going to slow our hiring down a lot.”

This area of Ohio has prided itself on having the resources available to produce affordable energy for decades, but regulations have the potential to drive up costs for companies and their customers, he said.

“Once the energy price is driven up, and they are trying to drive it up to where alternative energy is, since it’s not competitive, it’s going to start affecting manufacturing, those that rely on cheap energy,” James said.